The next few weeks will likely be full of anticipation (or perhaps trepidation) for all beneficiaries of the Social Security program. This is because on October 15th the Social Security Administration (SSA) will officially announce the Cost Of Living Adjustment, or COLA, figure for 2026. The COLA is an annual increase to all benefit checks that is implemented with the aim of countering the effects of growing inflation.
Since 1975, the SSA has been using a set formula based on a subset of the CPI to determine the COLA for each year. Prior to this, benefits would only receive an increase in the face of inflation at the discretion of Congress. Now, however, the COLA is implemented to benefit amounts each year without fail if inflation increases from the previous year to the current year.
In 2025, the COLA came in at 2.5% and all benefits were adjusted accordingly in January. Early projections from experts based on the data available to date show that a COLA of 2.7% to 2.8% is quite likely to bee seen in the new year. These are still just estimates, however, we are less than a month away from the next COLA announcement so these figures could hold steady.
How does the Social Security COLA work?
The COLA is calculated by using a specific subset of the CPI called the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, which is released on a monthly basis by the Bureau of Labor Statistics. The SSA takes the CPI-W for the third quarter (July, August, and September) of the current year and measures it against the third quarter CPI-W of the previous year. If there is an increase, this becomes the COLA figure for the next year. If there is a decrease, the COLA will merely default to 0.0%, meaning that beneficiaries will never have their benefits reduced due to deflation.
Since the Bureau of Labor Statistics release its various indices on a monthly basis, Social Security experts often share estimates for next COLA throughout the year using the data available to date. Independent analyst and Social Security expert Mary Johnson had initially estimated a 2.7% COLA, however, Johnson’s projections have since increased to 2.8%.
Using July’s data, The Senior Citizen’s League (TSCL) projected a COLA of 2.7%, and following the release of August data, the nonpartisan advocacy group recently shared an update stating that its projections for the 2026 COLA are sill holding steady at 2.7%. If TSCL’s estimations are correct, the average benefit check will see a $54 increase bringing the average up from $2,008 to $2,062, which translates to an annual increase of around $648.
CPI-W falls short in addressing rising costs for seniors
According to TSCL’s executive director Shannon Benton, “Many seniors believe inflation is much higher than the COLA estimates. For example, TSCL’s estimates that about 80 percent of seniors believed inflation in 2024 was substantially higher than the 2.5 percent COLA implemented to make up for it at the beginning of 2025.”
The reason seniors are feeling frustrated with their benefits despite receiving a COLA each year is likely due to the CPI-W. Whilst the CPI-W does have over 200 pricing categories, it prioritizes the spending habits of urban and clerical workers. This cohort is currently in the workforce and has vastly differing lifestyles and prioritizes different expenses than that of an average retiree.
Furthermore, the 2026 COLA may seem even more frustrating for seniors due to the projected increase in Medicare Part B premiums in 2026. According to the latest report from the Medicare trustees. the Part B premium — which is automatically deducted from Social Security benefits — is projected to increase by 12% in the new year. This would bring the cost of the premium up to around $207.
“Seniors across America are holding their breath as we wait for the official COLA announcement in October. Our research shows that about 39 percent of seniors depend on their benefits for all their income, so the COLA announcement has a direct effect on their quality of life,” Benton noted.